The Liberal government says it plans to introduce pharmacare legislation this year — as the clock ticks on its promise to the NDP to pass a pharmacare law by year’s end.
The Ministry of Health confirmed in a statement to Canadian Affairs on Wednesday that the government is “moving forward with national pharmacare legislation.”
“Important work continues in partnership with health experts, provinces and territories, stakeholders and Canadians so we can develop a Canada Pharmacare bill that we are working towards tabling by the end of 2023,” the statement says.
National coverage for prescription medications is a keystone of the NDP and Liberals’ supply and confidence agreement. Announced in March 2022, the agreement lasts until June 2025. But the NDP’s continued support for the minority Liberals is conditional on the government passing a Canada Pharmacare Act by the end of 2023.
There’s not a lot of time left to do that.
There are 27 sitting days, including November 2, before the House of Commons breaks December 15. There are 32 sitting days before the Senate breaks December 22.
Both the House of Commons and the Senate need to approve the bill for it to become law. That process, including any committee study, can take months and sometimes years.
Canadian Affairs requested an interview with the NDP to understand the implications if pharmacare is not passed before year’s end. NDP staff promised an interview with Don Davies, the party’s health critic who introduced a private member’s bill to create a national pharmacare program in June. But Davies was not made available for an interview before deadline and the party did not provide a written statement.
The Liberals are having ongoing discussions with the NDP about pharmacare, Christopher Aoun, spokesperson for Minister of Health Mark Holland, said in an email.
‘Significant transfer of expenditure’
Experts say Canada is the only country with universal health coverage that does not have universal coverage for prescription medications, the Parliamentary Budget Office said in a report released last month.
Canadians spent $36.6 billion on prescription drugs, excluding hospital medications, in 2021-2022, the report says. Only 14 per cent of that cost — $4.9 billion — was paid by individuals. Public plans already covered nearly 46 per cent of total costs — $16.8 billion. Seniors, people with disabilities and young people not covered under private insurance are some of the people eligible for coverage under public plans.
Private insurance plans provided the remaining 40 per cent of coverage — $14.64 billion. But private insurance plans often don’t cover all drug costs, meaning people still have to pay some drug costs themselves.
In its report, the budget office estimated the total cost of a national pharmacare plan would be $33.2 billion in 2024-2025, a decrease from total spending this year.
Total savings on drug spending would go from $1.4 billion in 2024-2025 to $2.2 billion in 2027-2028, the report estimates. The report says that this is because the government will be able to negotiate lower prices for medication.
There have been many estimates about what pharmacare could cost, says Michael Law, Canada Research Chair in access to medicines and a professor at the University of British Columbia.
“They all come up with pretty consistent answers, which would be that it would be a reasonably significant transfer of expenditure from the private side to the public side,” he says. The budget office’s estimates are based on Quebec’s drug coverage, which is “one of the most generous in Canada,” he says, calling it a “high-end” estimate.
Drugs are expected to cost less under a pharmacare plan because provinces have more experience negotiating with pharmaceutical companies, he said. Provinces also typically choose to cover less expensive drugs, he said, and their administration costs are less than insurance companies.
The budget office’s estimates are based on a plan that would have most Canadians pay $5 for brand-name prescriptions. Seniors, children and young students, people with physical disabilities and people receiving social assistance would be exempt from the fee.
Importantly, the budget office estimated costs for a single-payer pharmacare program. In this model, the federal government would administer the plan. It would “replace existing public and private drug plans,” the budget office’s report says.
Necessary or not?
“There’s still a lot of people that are going without medicines because they can’t afford them,” says Law.
For example, Ontario and British Columbia both have public programs to help with drug costs, but people still have to pay a lot before the programs will kick in, Law says. “Technically everyone has coverage, but that may not give them a lot of financial protection because they may still be required to pay a lot of money on those public plans to get coverage for the drugs they actually need.”
“People have a right to access this essential health care service which is not the case right now,” says Marc-André Gagnon, a public policy professor at Carleton University.
Brett Skinner, CEO of the Canadian Health Policy Institute, disagrees. He calls the model of pharmacare proposed in the budget office’s report “unnecessary” and “bad for patients.”
Public programs already help cover drug costs for low-income Canadians and those who don’t have private insurance through their employers, he said. The real problem with drug coverage in Canada is that public plans don’t cover all medications.
“That’s where the gap is,” he says.
Public plans also vary between provinces and territories, meaning people may not have certain coverage depending on where they live.
Private insurance needs to remain intact, says Skinner. “The coverage under public plans is so much worse than the average under private plans,” he says.
Canadians need better drug coverage, he said, but this plan isn’t the way to do it. “We can do all of this without creating a bunch of political conflict and disruption and [at] much less cost to the taxpayers,” he says.
